Being a good leader requires more than just knowing the right way to do things. It also requires knowing how to choose the right things to do. Decision-making is arguably the most difficult, and the most essential, task a manager performs. Effective decision-making makes it possible for organizations to succeed by aligning their resources with their objectives.
Decision-making is hard because of various cognitive and organizational limitations such as limited memory capacity, framing bias, overconfidence, politics, groupthink, loss aversion, sunk costs, endowment effect, availability bias, anchoring, and representativeness. To cope with these and other limitations, managers have resorted to various decision-making strategies, such as intuition (aka “seat of the pants judgment”), BOGSAT(“bunches of guys and gals sitting around talking”), rules of thumb, heuristics, simple tradeoffs, nutshell briefings, satisficing, and misuse of numbers.
Executives rate decision-making ability as the most important business skill, but few have the training they need to consistently make good decisions. Decision-making skills are easily taught. Coaching helps decision-makers improve their performance, as it does for athletes.
